Minimising your Land Tax bill. This may work?

[The_Bludger]

Hi all,

I have a few IP's jointly owned with my wife in our personal names and our Land Tax bill is horrendous. So, how do I get around this?

I was looking at setting up a Trust per property purchase moving forward(If Land value under $600K, I only pay $926 per trust). However, I am not aware of how the ATO treat separate trusts with the same Directors. Ie. Will the ATO add up all properties in all Trusts and issue me with a massive Land Tax bill or is each trust independent of one another, regardless of Director ownership?

Your thoughts?

PS. I am not interested in buying interstate.

 

[Terry_w]

Hi all,

I have a few IP's jointly owned with my wife in our personal names and our Land Tax bill is horrendous. So, how do I get around this?

I was looking at setting up a Trust per property purchase moving forward(If Land value under $600K, I only pay $926 per trust). However, I am not aware of how the ATO treat separate trusts with the same Directors. Ie. Will the ATO add up all properties in all Trusts and issue me with a massive Land Tax bill or is each trust independent of one another, regardless of Director ownership?

Your thoughts?

PS. I am not interested in buying interstate.

Trusts don't have directors, but trustees.

Separate trusts are assessed separately for income tax purposes, even if the trustee is the same.

but first you might want to look into the land tax aspects a little more closely.

 

[danwatto]

Hi all,

I have a few IP's jointly owned with my wife in our personal names and our Land Tax bill is horrendous. So, how do I get around this?

I was looking at setting up a Trust per property purchase moving forward(If Land value under $600K, I only pay $926 per trust). However, I am not aware of how the ATO treat separate trusts with the same Directors. Ie. Will the ATO add up all properties in all Trusts and issue me with a massive Land Tax bill or is each trust independent of one another, regardless of Director ownership?

Your thoughts?

PS. I am not interested in buying interstate.

Can't be done in NSW, but you're in VIC so different rules. I know some states like SA it works.


Now it's going to be your local state revenue office, not the ATO as well. The ATO only sees your land tax as a tax deduction.. so you pay the state, but claim some back from ATO.


However your next problem is that trusts in VIC only get $25,000 threshold.
http://www.sro.vic.gov.au/SRO/srona...0442101-C580F3A333F4AD44CA2575D10080AD1C?open


Death and taxes.. the only certainties in life

 

[RPI]

QLD you get $350k threshold per trust. As long as you use a corporate trustee then you can have the same beneficiaries.

You can even have 2 separate trusts with 2 separate corp trustees own the property as tenants in common and then have $700k before you start paying LT.

Every state is different, some extremely.

 

[Hodge]

Also think about all the extra yearly fees associated with trusts. They're not cheap to run.

 

[RPI]

Also think about all the extra yearly fees associated with trusts. They're not cheap to run.

But they are way cheaper to run then the land tax bill you pay in a lot of instances

 

[Terry_w]

Also think about all the extra yearly fees associated with trusts. They're not cheap to run.

from $0 to about $500 for a trust with a corporate trustee and one property.

 

[marty998]

Can't be done in NSW, but you're in VIC so different rules. I know some states like SA it works.

Now it's going to be your local state revenue office, not the ATO as well. The ATO only sees your land tax as a tax deduction.. so you pay the state, but claim some back from ATO.

However your next problem is that trusts in VIC only get $25,000 threshold.
http://www.sro.vic.gov.au/SRO/srona...0442101-C580F3A333F4AD44CA2575D10080AD1C?open

Death and taxes.. the only certainties in life

There's a third one - being taxed in death.